In response to Hyundai Capital America’s floorplan fraud suit, Cortland Manor, N.Y.-based Picon Motors LLC claims it is no longer in possession of the eight vehicles the captive sought to repossess from its now-defunct Kia dealership, according to July 18 filings with the Westchester County Court. HCA originally sued the dealership on the grounds it sold six floorplanned cars and didn’t repay the captive.
The eight vehicles HCA sought to repossess were sold in two transactions prior to a June 27 restraining order barring the dealership from moving the cars out of the state, according to the filings. The first transaction was comprised of the sale of a single vehicle to a private citizen and financed through U.S. Bank in the amount of $31,318.50. The seven remaining cars were sold to Kearny, N.J.-based dealer Towne Auto Sales. Payment for those vehicles was sent directly to Santander Consumer USA, the floorplan financier for Picon Motors’ one remaining dealership.
Picon Motors claims that it sold the cars out of necessity to keep its single remaining dealership in operation. To date, Picon Motors has incurred $2.1 million worth of losses, with $1.9 million owed to HCA. Since it first began making payments in December 2018, Picon Motors has reduced its debt to the captive to $388,940.
“The continuing viability of [the last remaining dealership] is the key to my being able to pay off the rest of the indebtedness to HCA,” Drew Picon, owner of Picon Motors, said in an affidavit. “The money obtained by virtue of the sale of the eight vehicles was necessary to keep my remaining dealership running.”
The next hearing is scheduled for Jan. 15, 2020.